Forget the Double-Dip: Stocks Still Can Rise in Bad Economy
Published: Wednesday, 25 Aug 2010 | 12:02 PM ET Text Size By: Jeff Cox
CNBC.com Staff Writer
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Even if the economy performs as poorly as expected for the rest of the year, that may not mean bad times on Wall Street.


Stocks often rise even in bad economic times.


Some analysts maintain that cheap valuation will provide a boost to the markets in the current downtrend.
In fact, during times of slow economic growth since 1990, stocks have risen twice as often as they have fallen. The trend is important to remember amid a series of GDP downgrades from major analysts and worries that the economy even could fall into a double-dip or worse.

Many major analysts—Goldman Sachs and JPMorgan among them—have cut their GDP projections to below 2 percent for the third quarter and about 2 percent for the fourth. What that means for the stock market, though, may not be so obvious.

"Basically when you look at GDP numbers coming out they usually are not a very good predictor of the stock market," says Sam Stovall, chief investment strategist at Standard & Poor's. "It's sort of the other way around. The stock market tends to predict movements in the economy by six months."

The recent history of economic slowdowns is one of opportunity for stock-buying investors, sometimes in the extreme.

Take 1995, for instance. With GDP trudging along at a respective 1 and 0.9 percent pace in the first and second quarters, stocks were booming. The Standard & Poor's 500

[.SPX 1056.04 4.17 (+0.4%) ] gained 9 percent in the first quarter, then kept the momentum going with an 8.8 percent rise in the following three months.


AP
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The 2001-2003 recession also saw good times for the market. GDP grew 1.4 percent in the fourth quarter of 2001, while the S&P rose 10.3 percent; growth was 0.1 percent in the fourth quarter of 2002, vs. an S&P gain of 7.9 percent.

The average stock market result on the 18 quarters between 1990 to 2010 when GDP was between zero and 2 percent was a gain of just under 3 percent.

One of the keys to the reverse coordination between the two measuring sticks is that stocks tend to do well when nobody expects it.

"When you have lowered expectations you can have a potentially good rally," says Ryan Detrick, senior analyst at Schaeffer's Investment Research in Cincinnati. "It makes sense that at times when you have lukewarm growth but overall expectations are probably lowered, you can have those upward surprises in the stock market."

Stocks even have held their own during times of economic contraction.

Of the seven negative GDP readings during the same time period, the S&P rose three times, including the 15.8 percent gain in the second quarter of 2009 when GDP fell 4.9 percent, and a 13.6 percent rise in the first quarter of 1991 when GDP fell 1.9 percent. The average was a gain of 1.23 percent.




Jeff Cox
Staff Writer
CNBC.com
"You've got this economic growth piece, but then you've got this other piece which is, 'What do I do with all this money in a money market paying me 0.25 percent?'" says Nadav Baum, executive vice president at BPU Investment Management in Pittsburgh. "That's the dilemma that investors are looking at, and they're starting to realize that 'I'm probably OK to go out and buy big dividend-paying stocks.'"

With the possibility of the US economy slipping back into negative growth posing an increasingly high danger, the notion that stocks can still rise might provide some comfort to equities investors.

Economist David Rosenberg of Gluskin Sheff on Tuesday reiterated his assertion that the US economy is not in a recession but rather a depression. But even he pointed out that stocks rallied sharply for several years during the Great Depression before falling again.

The Dow Jones Industrial Average [.DJIA 10067.32 26.87 (+0.27%) ] rallied about 64 percent in 1933, another 38 percent in 1935 and 24 percent in 1936, before falling 32 percent in 1937.



"Even though the GDP number is getting weak, that doesn't mean stocks can't go higher," Baum says. "It's not just a factor of GDP. There are other forces that can help stock prices go up right now. The bigger factor is, 'Where can I do to make the money on my money?'"

S&P's Stovall argues that valuations continue to be attractive based on current consensus earnings estimates.

The current S&P price-to-earnings ratio on a non-Generally Accepted Accounting Principles basis is 14, which Stovall says is a 26 percent discount to the average P/E on trailing earnings on records dating back 22 years. On a GAAP basis, that number goes to 17, which is actually a 36 percent discount to average over the same 22-year period, and is level with the average GAAP basis since 1936.

S&P actually is projecting that stocks could fall on a short-term basis back to a bear market—20 percent drop from the April 23 highs—before shoring up and turning positive. The firm has a 1,190 price target for the "500" in the next 12 months, a jump of about 13.5 percent from the current level. The index has fallen 14 percent from the April high.


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'QE': Why Should Investors Care?Depression, Not Recession: Rosenberg
"Unless we expect earnings to actually decline moving forward, rather than advance at a slower pace, I would tend to say that valuations would stop us from seeing anything more than a light to average bear market," Stovall says. "The market is readjusting itself. Maybe we could end up seeing a sharper move downward in the next month because investors want to get it over with."

© 2010 CNBC.com

REMEMBER MY SMS TO SOME OF U ALL IN MID APRIL 2010 WHEN I WAS IN HONGKONG--WHEN STOCKMKT GO UP WITHOUT POSITIVE DIVERGENCE, THIS IS THE END RESULT...
TECHNICAL ANALYSIS DIFFERENTIATE A FAKE RALLY FROM A TRUE RALLY, BUT NO ONE IS GONNA PREDICT 100PERCENT WHEN EXACTLY.
I DONT KNOW WHY SOME IDIOTS TELL ME FUNDAMENTAL REASONS LIKE US GOVT CANT MAKE STOCKMKT FALL BECAUSE HAVENOT REMOVE BAILOUT PACKAGE,ETC.
STOCKMKT NEVER LISTEN TO FUNDAMENTALS, TEXTBOOK STLY UNIVERSITY ECONOMICS

John said...
thanks skeptic.
I was pleasantly surprised that my comments was highlighted in your blog. My name is John, so I guess you can put a name to anonymous.

I do apologise for the typo and grammer mistakes in my previous blog. I also realize my comments could have offended some people but I have no ill intent.

I have met many Singaporeans who took the plunge abroad but at the end chose family first and decided to return to Singapore. I respect that, especially for those with children. It is not easy. But like I say, working and succeeding overseas require sacrifices. Unless you have a cushy expatriate package (which are rare these days), you need to be separated from your love ones and tough choices need to be made. The point I was trying to make is that if you make a conscious decision to work abroad, then start planning ahead, mentally prepare to make sacrifices, it is possible to find jobs abroad. It is not a bed of roses but the benefits outweigh the shortcomings.

What worked for me may not not work for the rest, but here it goes:
1) decide which country you want to go. sounds obvious, but you will be surprised that most people have no clue what they want. I decided on China because I saw the opportunities to extend my career by easily 15-20 years especially for my industry. I looked at my colleagues in their 40s struggling to do something in a tiny market like Singapore and decided that I need to do something before I hit 40.
2) your next employer are likely to be abroad so it only makes sense to find any opportunities you can find on overseas conferences, job fairs, network and get to know people overseas. Pay for the trips yourself. "The prophet is never acceptable in his own country', basically, local employers in Singapore and headhunter will give you a huge discount when you tell them you want to work abroad. It is almost discrimination. No different from government treating foreigners better than Singaporeans. To give you an example I once wrote to an international headhunting firm based in Singapore and after the interview, I was so demoralized I wanted to give up. I wrote in to HK (same firm) directly, met with their partner, cleared all the interviews and was eventually hired. You need to find a way to present yourself in front of your prospective employer and show them you are hungry and willing to compete on local terms. If you are competent, you will get the job. More importantly, finance and legal sector in HK pays much better than Singapore. I eventually find my way to China, but that is another story. The jobs you are looking for are not on internet or classified ads, especially for senior positions. Attend overseas conferences, trade fairs, and pay for it yourself if you have to and network like crazy. I just don't see many singaporeans hungry enough to do this.
3) I once told a Singaporean to apply for CEIBS (a business school in Shanghai) instead of NUS if he really wants to work in China one day. I was given the usual, cost of living, ROI, value for money analysis. 40% of the participants in CEIBS are foreigners, where most of them eventually found jobs in China. Today, CEIBS is the top 10 business school in FT and NUS is still well..you know. Most Singaporeans, if they can help it, would like to stay in Singapore and use Singapore as a base to travel. It used to work, but I don't think it is feasible anymore. My point is, if you want to work in that country, best to study in that country as well. If all you have is a local degree in NUS/NTU, either you have a lot of overseas assignments to back you up or you have something else to offer.
4) Start the first few years alone and once you build some foundation and cash, bring your family over. The first few years are the toughest, but if you survive, it gets easier. How to survive is probably another topic for another day.
5) be aware of the forces that hold us back. Going overseas is a personal change process, and the comfortable lifestyle here in Singapore, girlfriends, wives, parents desire for children to stay close to them, all could be possible forces that hold us back. If you cannot afford to leave your love ones, then don't go abroad. There are friends of mine who refused overseas posting because they don't want to be apart from family. I respect that and it is a very personal choice. On another note, I am also aware that this friend of mine is struggling to find a meaningful job for 3 years since he was retrenched at 40. His company was moved to China.If he had gone with the posting, he probably still have a job and probably clocked a lot of useful experiences abroad as well.
6) there are people who are still doing very well without leaving Singapore. Your girlfriends and wives will be reminding you this as well. HR professionals, never seem to have problems looking for jobs. You make an assessment of your own industry, where is it heading and if having overseas experience benefits you.

I wish everyone the best and thank you for reading this.

May 1, 2009 3:14 AM

Singapore's Online CommunityForums

Login 27 Apr, 04:20AM in sunny Singapore! Home → Speaker's Corner →
Are Singaporeans cowards? 85 posts
Please Login or Signup to reply. « Previous 1 2 3 4 Next »
bila_prem

164 posts since Sep '05 22 Jul `07, 11:32AM I’ve seen european nations voicing out their anger against the government. Its people more powerful than the government. Are we in a communist nation who keep our mouth shut and let the government climb on top of our heads?

mochou

1,743 posts since Jan '03 22 Jul `07, 11:36AM See towards who loh, towards gahmen, most likely yes.

But most singaporean are not cowards, you see how they complain at service line staffs(Restaurant, hotel, airport counters, etc), they so fierce.

taken from sgforums

LOOK AT THAT COMMENT BY A FORUMMER IN SGFORUMS.THAT IS THE TOP REASON WHY I HATE MOST SINGAPOREANS

Cost of living in Shenzhen
Shenzhen is one of the most expensive cities to live in China, but still relatively cheap compared to most Western major cities.To give you an indication of how much things cost, I collected some prices. I'm sure prices will vary a bit depending on where you buy and which brand you buy, but this should give you a good indication. I rarely eat in Western restaurants and have adopted a Chinese eating pattern. If you enjoy Western restaurants, you obviously will spend more. Living costs are relatively most expensive, house prices came down in 2008, but have risen a lot again and buying a house in a good location in Shenzhen is expensive.


The areas near the border with HongKong (traditionally Futian and Luohu, but now also increasingly Nanshan) are a bit more expensive to live. Living in the center also has other benefits, for example closer to library, more shopping malls, more restaurants etc. Bao'an is currently fast expanding and when the subway finishes in 2011, Bao'an will be more convenient to live as well. Whenever you go to Bao'an (where the airport is) you definitely feel that it's further away from the center: less high buildings, broader roads, less people.


Compared to the Netherlands, Shenzhen is still much cheaper to live. Especially eating in restaurants in much cheaper. House prices had gone up a lot and were approaching Dutch levels, but have since dropped off quite a lot; since the start of 2009 they are rising again. Never trust prices you see advertised online, but come here and look around. Because house prices dropped so much, it's now easy to find a place to rent. Also realize that 100m2 is already quite big in China and it should cost below 5000Y/month. (I sometimes see advertisements targeted at foreigners asking ridiculous prices -be warned and just look around and bargain).



According to Mercer's 2009 survey of living costs Shenzhen is now 22nd on the list of most expensive cities in the world for expats! Mercer's Cost of Living survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

1. Tokyo - Japan


2. Osaka - Japan

3. Moscow - Russia

4. Geneva - Switzerland

5. Hong Kong

8. New York


9. Beijing

12. Shanghai

16. London


22. Shenzhen

23. Guangzhou



This is my personal, unscientific, list of daily items. Just use common sense in China and live like a Chinese, then you will see that the cost of living is not so high.

Food/Drink
Price (Yuan)
milk, small paper cup 2.90
white bun supermarket 1.8
half sliced bread 5
apples (per kg)
7
water (1.5 liter)
2.5
lettuce (0.5 kg)
1
rice (0.5 kg)
2
pork (0.5 kg)
12
spareribs (0.5 kg)
18
bag of nuts
5-20


Daily usage
big bottle soap 20-30
t-shirt, men 20-50
shirt, men
40-200



Restaurant
dinner, 2 person 30-120
lunch, 2 person 25-50
chinese fast-food order (incl. delivery)
10-20
some dishes

fish 20-100
vegetable 10-30
meat 20-50
rice/bowl 1-2


Living/work
rent house, 50m2
2.000Y/month * see note below

rent house, 100+m2, good location 8.000Y/month
buy house (normally 70-150m2) 7-25K RMB/m2
utility (electricity, water, management)
200/month
internet 2MB ADSL
1440Y/year
native english teacher, fulltime
10.000+Y/month *see note below

taxi 5 km (start 12.5)
20
bus/subway 2-5/trip



Also take a look at the Chinese supermarkt folder I scanned, this will give you an even better idea of the things you can buy and for what prices.

* note about apartment renting costs July 2009:

Just like salaries, the prices for renting an apartment vary hugely. You can go from 1500RMB/month for a cheap community, where normal Chinese people live to extremely luxurious which are twenty times as much ! Also be aware that the English-language classifieds are usually not the cheapest. Best option is just to look around while you are in the city and go to some Chinese real estate companies. Prices have dropped a lot in 2008, but have been rising since the start of 2009 again. Some examples of expensive apartments on offer at ShenzhenParty :

Location Size (m2)
Description price RMB /month
Futian CBD 109
3 bedrooms (one master bedroom), 2 bathes, 1 large living room & 1 dining room 8.500
Futian Honey Lake 200 3 bedrooms, 1 study room, 1 living room, 1 dining room, 1 kitchen, 1 balcony. 30.000
Futian, near to Co-co park 151 3 bedrooms ,and 2 bathrooom, fully furnished and equiped 12.000
Futian Che Gong Miao Metro Station 116
2 bedrooms, 2 bathrooms, 1 study room, 1 living room, 1 dining room, 1 kitchen 8.000
Luohu center,beside Diwang mansion 63 1 livingroom,1 big bedroom,1 kitchen,1 washroom 5.500
Luohu KingGlory plaza 42 2.000
Nanshan Coastal rose garden 127 3 bedrooms 2 bath 5.900
Nanshan/Shekou Sea Taste Garden 78 2 bdrooms, 1 bath , 1 nice kitchen , 2balcony , 1 living rooms 3.800

As you can see, 2000 is about the minimum you pay in reasonable locations. You can go lower by looking around in the city. It's easy to spend over 8000RMB/month for big apartments.



*note about salaries foreign teachers:

The State Administration of Foreign Expert Affairs has updated the salary guidelines for a foreign expert or teacher in July 2009. Salaries start at 3,000 to 4,100 yuan per month for bachelor degreed teachers in underdeveloped western areas to as high as 12,000 to 15,000 per month for full professors in first-tier east coastal cities such as Shanghai and Guangzhou. Although these salary guidelines are more realistic than the previous recommendations, they are still lower than what a foreign teacher should expect

2010 Ranking of Home Property Prices in Chinese Cities: Shenzhen Takes CrownApr 05, 2010

Elivecity.cn, an online market research agency in China, has published their ranking of “January 2010 Home Property Prices in Chinese Cities” on March 29th. The results find that Shenzhen has the highest home property prices of the Chinese cities researched, with new homes selling at an average price of 22,304 RMB/square meter; Shanghai came in second with a home price average of 20,186 RMB/square meter; Wenzhou ranked third with a home price average of 20,050 RMB/square meter.



This is the fourth research and report on home property prices in China done by Elivecity.cn. For this year's report, they've researched over 100 major Chinese cities, including provincial capitals, major port cities and hubs of commerce, cities with economic aggregate totaling over 100 billion RMB, cities with GDP per capita near or above the national average, major cities for tourism and travel, etc. The home prices have steadily ballooned in China in spite of the economic recession and this is especially true for Nanjing, Sanya, and Shenzhen – where prices have climbed 91%, 66.5%, and 51% respectively in the last 6 months. The top 10 cities ranked in the survey that have home prices averaged at more than 10,000 RMB/square meter are as follows: Shenzhen, Shanghai, Wenzhou, Beijing, Hangzhou, Sanya, Ningbo, Xiamen, Guangzhou and Dalian. Elivecity.cn has also published a ranking of top 10 most expensive residential areas in the different researched cities to give a better idea of the different appropriation of home prices within a city.

According to a staff member with Elivecity.cn, the research results of average home property prices for a city have taken into consideration the following info: 1. formal figures published by experts; 2. actual prices researched; 3. statistical analysis of price trends in major real estate markets for the region. And because the cities and communities all vary in size, the average home prices were calculated in accordance with the highest and lowest priced regions within a city to give a more accurate presentation. Metropolises like Beijing and Shanghai are made up of numerous regions and districts that vary greatly in respective home prices. For example, home prices in Pinggu district of Beijing averaged at 6,096 RMB/square meter while those in Xicheng district of Beijing averaged at 33,125 RMB/square meter; homes in Shanghai Songjiang district averaged at 9,700 RMB/square meter while those in Jing'an district averaged at 32,200 RMB/square meter.

Hong Kong May Increase Sales Taxes on Homes, Sell More Land
April 21, 2010, 4:40 AM EDT
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e-mail this story print this story digg this save to del.icio.us add to Business Exchange By Sophie Leung

April 21 (Bloomberg) -- Hong Kong said it will raise sales taxes on some properties and accelerate government land auctions to prevent a bubble in a real estate market where prices surged 29 percent last year.

The city may raise the stamp duty on homes sold for less than HK$20 million ($2.58 million), Financial Secretary John Tsang told lawmakers today. The average size of loans approved in February in Hong Kong was HK$2.21 million, according to the Hong Kong Monetary Authority.

“The government is deeply concerned about the rising trend of property prices,” Tsang said. “I understand the worries of residents about rapidly rising home prices, and I agree that we need to reduce the bubble risk in the property market to avoid any impact on the financial system’s stability and the recovery in the real economy.”

Buying by mainland Chinese and low borrowing costs have driven a 7.4 percent increase in Hong Kong home prices this year, adding to 2009’s advance. The government in February said the stamp duty on homes selling for more than HK$20 million would be raised to 4.25 percent from 3.75 percent as of April 1.

It raised down payments on luxury homes in October. Luxury properties are those that cost at least HK$10 million each or are bigger than 1,000 square feet (92.9 square meters).

“Such mere empty talk is useless in helping to bring home prices down,” Kevin Lai, economist at Daiwa Capital Markets Hong Kong Ltd., said by phone today. “Even if the policy turns real, it won’t help to curb speculation as long as interest rates are kept at a such low level.”

Least Affordable

Hong Kong homes are the least affordable among the world’s major cities and are rapidly becoming less accessible to the residents, according to a study commissioned by the South China Morning Post, the city’s biggest English-language newspaper. The study used international comparisons and Hong Kong government figures, the newspaper said.

The territory had the greatest disparity between rich and poor among Asian cities, according to a 2008 report from the United Nations. The Gini coefficient, which measures wealth inequality, was 0.53, compared with an average of 0.39 for Asia, the report said. A Gini coefficient of zero indicates perfect income equality and 1 reflects perfect inequality.

Two residential sites, one in Kowloon and the other on Hong Kong Island, will be auctioned off in June and July without developers having to indicate interest first to trigger bidding, Tsang said. That would bring to four the total number of sites the government is selling in the coming three months, Tsang said.

Auction System

In Hong Kong, the primary source of land available to property developers is through government auctions. Under the current system, developers must indicate interest in a site on a government list. Once a “trigger price” has been met, the site is auctioned.

The government will change the way it puts sites up for auction, Tsang said in his Feb. 24 budget speech. The government would consider putting sites up for sale even if they haven’t been triggered, he said then.

Hong Kong will hold two land auctions for sites in the New Territories in May with developers triggering the sales.

The city will make about 55,000 new homes available in the next three to four year, Tsang said.

Low mortgage rates and excessive liquidity, coupled with not enough supply are fueling the risk of property-price bubbles, Tsang said.

The 20-year-low mortgage rates won’t be sustained for long as governments around the world wind back stimulus measures, he said. A 3 percent rise in rates would boost monthly mortgage repayments 30 percent, Tsang said, citing a stress test result.

“I urge residents or investors to carefully assess the impact of climbing interest rates on mortgage payments when they consider buying apartments,” Tsang said.

While gains in Hong Kong home prices had “tapered slightly” in recent months, the “increasing risk of a property bubble cannot be ignored,” Tsang said.

The Hong Kong government plans to prevent developers from enticing buyers with inaccurate models of apartments and to scrutinize their sales tactics. Real estate companies should disclose properties sold to their own executives, Secretary for Transport and Housing Eva Cheng said on April 12.

--Editors: Andreea Papuc, Joost Akkermans

To contact the reporter on this story: Sophie Leung in Hong Kong at sleung59@bloomberg.net

IDIOTS WILL FOREVER BE IDIOTS.BUYING PROPERTY AT PEAK IS AKIN TO BUYING AN ILLIQUID STOCK LIKE AUSSINO,ETC. somemore, buying residential properties machiam hk population 20m, as full of 40storey apartments whereas singapore population 5m only with not so many high rise.
IDIOTS SPECULATE RESIDENTIAL PROPERTY WITHOUT THINKING OF SUPPLY,ETC.only low interest rates,etc.MACHIAM THEY DONT NEED LOANS FROM BANKS TO BUY.IT IS VERY OBVIOUS THEY ARE DAMN IDIOTIC AS THEY NEED TO BORROW FROM BANKS YET NOT SCARED OF RISING RATES!!!!

this is called ARITHMETRIC PROGRESSION:
A.P. from the top is 960+(n-1)200=1560, n= 4,d is the common difference,remember the formula?T = A+(N-1)d


as sp500 tests the upper resistance trendline so many times, i favour for a breaking of THAT trendline to 1350 this week.

CONCLUSIONS: AS JES CONSOLIDATION WAS A STRAIGHT HORIZONTAL BASE THE PUSH UP WAS IMMEDIATE BREAKING THE 1YEAR RESISTANCE TRENDLINE AT 5TH TIME, MERCATOR CONSOLIDATION FORMATION WAS NOT SO NEAR THE 1 YEAR RESISTANCE TRENDLINE ,HENCE THE 7.5C PUSHUP WAS NEEDED TO "PARK" JUST BELOW THAT CRUCIAL RESISTANCE,AND A 3.5 C RETRACEMENT FOLLOWS.WE SHOULD HAVE A 7.5 C PUSHUP IN THIS COMING WEEK STARTING 26APR 2010,WHICH WILL TAKE US TO 38C IN THE SAME MANNER AS JES.

MARGIN 800 LOTS AT 22.2C TODAY
closing 24 C rested for ONE YEAR., PLUS BEAUTIFUL WEEKLY,DAILY CHARTS WHAT MORE DO U WANT?
EXACTLY LIKE SWIBER LAST TIME IN 2009 MARCH.SWIBER CHIONG FROM 25C TO 1 DOLLAR FROM MARCH TO MAY 2009

LOOK AT THE TOP BOLLINGER BAND, TRENDLINE AND JAN21 2010 HIGHEST POINT
ALL MERGE INTO ONE POINT!!

»Ruminations of an Overseas Singaporean

This is my tenth, or eleventh year away from Singapore and I am not quite sure if I can articulate how I feel about my home country. After all, every national day over the past decade was spent away from Singapore, and this year is no exception.

Looking back, I can hardly remember what I did over the past ten national days. There was one year where I sang Count On Me Singapore in the bathtub on the morning of August 9th. That was in Beijing, probably in 1999 or 2000. There was another year where I tried visiting the Singapore Embassy, only to realize that it was national day and the Embassy was closed for the day. Jeez. That was in 2005 where I was studying in Seoul. I actually forgot it was national day when I left home that day.

But national days over the past decade were mainly about attending the occasional national day gatherings/receptions, mostly in Beijing, and twice in Washington DC, where I was pursuing my masters in international affairs.

Living in four different cities over the past decade has enabled me to see Singapore through the eyes of the many – often interesting, intelligent and discerning - people I have met, though admittedly many harbor fairly stereotypical views of the island.

Mainland Chinese I have met often praise Singapore for its efficiency, good governance, lack of corruption and cleanliness. But they would also lament about how small, hot and humid the country is.

South Koreans generally have a high regard for Singapore. They give top marks to the island for its efficiency and good economic performance. As Koreans took pains to remind me, Singapore companies own some of the most prestigious addresses in downtown Seoul, such as Seoul Finance Center in downtown Gwanghwa-mun. And oh yes, they love Yakun kaya toast!

Hongkongers, on the other hand, generally view Singapore as the territory’s competitor. Many Hongkongers describe Singapore as sterile, uninteresting and too restrictive on personal freedoms, unlike their (still fairly) laissez-faire territory. The only redeeming quality about the island, in the minds of these food-conscious Hongkongers, is Hainanese chicken rice and a whole array of other delectable hawker fare.

As for Americans, well, at least ordinary Americans, I am usually the only Singaporean they have ever met in their lives. In 9 cases out of 10, when I say I am from Singapore, the name Michael Fay would inevitably be brought up. Never mind that it has been almost 14 years since the American teenager was caned in Singapore for vandalism. Then of course there were questions ranging from whether “is it true that you cannot chew gum in Singapore”, to “is it true that you can get jailed if you do not flush the toilet after use?”

My American classmates would usually try to engage me in discussions about why political liberalizations in Singapore had not kept pace with economic development. As for my professors, I would invariably be asked during class discussions to “speak from a Singaporean viewpoint” on issues ranging from regional security, the island’s zeal in embracing FTAs (Free Trade Areas), to the influence and legacy of Confucianism in Singapore (huh?).

So, much as I wished to (occasionally) underplay my nationality, it is about as easy as erasing a permanent 10-cm mole on one’s face.

But if there is anything that had been driven home to me after being away from Singapore for over a decade, it is the sense that Singapore is small and will always be constrained by its size and geographical limitations. The best that the island state can hope to do is play a role that is incommensurate with its size, and remaining useful and relevant both regionally and globally – both of which the country had done with aplomb. Of course, such an awareness of Singapore’s limitations should not be viewed in a pessimistic way, but pragmatically. The awareness stems from the amazement that an artificial creation like Singapore had come this far, coupled with the worry and anxiety of the long-term viability of this artificially created entity whose idea of a shared historical and cultural heritage is to draw from the heritages of our Asian neighbors in Malaysia/Indonesia, India and China.

A country that begins with a clean slate and little historical baggage (except with its closest northern neighbor) is a great recipe for nation building. But will it be an equally good recipe for nation-bonding, and nation-togetherness in the midst of turbulence and turmoil? Will all the singing of Count On Me Singapore tide us through a crisis, given that countries with longer and more deeply-entrenched historical and cultural traditions had crumbled in the face of crisis, wars and devastation?

I do not know, and honest to goodness, do not wish to see any of the above scenarios materialize. All I hope for, at least during this national day, is an authentic bowl of laksa, a plate of truly spicy and sour-rish rojak and a steaming-with-fragrance plate of Hainanese chicken rice.He’s looking to open either in Hong Kong or Singapore. This is interesting because he prefers Hong Kong to Singapore mainly because the Hong Kongers are more appreciative and show more respect whereas while Singaporeans love their food, they tend to haggle over small things like corkage.



FROM http://food.recentrunes.com/?p=1458.

Hong Kongers, according to him, are more willing to spend on food. He fears that Singaporeans are unwilling to experience, for example, the cost of his upcoming menu of new dishes where (possibly) a single course of Abalone that costs (not priced) S$300 and takes several days to prepare.

While this blog has strong views about corkage, having spent some time with Hong Kongers (they party really hard), I must agree with Chef Chan’s observations.

That’s ok because the Egg Tarts with Ginger sauce arrived. This is the other famous must-try item that everyone whose had this since Hai Tian Lo has been telling this blog.




Indeed, this blog was blown away with the exquisitely balanced taste of the creamy egg tart with just the hint of ginger. However, this got mixed reviews because some preferred a stronger treatment of ginger. This blog feels that a small shift in either way would have ruined the whole delicate ensemble. This was a good way to finish off the meal.




Chef Chan is a soft-spoken but friendly person with very strong views on how Chinese cuisine should be approached (Without fear but taking care in the details). The food issued from the kitchen was consistent with all feedback and reports from friends who have visited. The service was very good with a ratio of 1 staff to 4 diners with the Restaurant Manager hovering in the background constantly tweaking the service.

I would like to think that the food quality, in terms of execution, suffered a little because of the fact that it was closing soon. This blog can’t help but think what the new menu would be like with the personal touch of the Master.

elindra

52,427 posts since Jun '04 14 Feb `08, 3:49PM Can ~

But can you be as productive as the Hong Kongers?

They work like there is no tomorrow. Singaporeans want me time, complain about long work hours, cannot be scolded etc etc.

If you talk about USA, they have a minimum wage in place and high salary paid out but they are still competitive? Why? Because they are very productive. Productivity is high, planning is good, and despite the long hours and tough conditions (you should visit a USA meat processing plant if you have the chance), the people remain chirpy with high morale.

The average Singaporean cannot compete with the average Hong Konger in terms of productivity. They also dun have the Hong Kong never say die attitude.

So unless we change, we can just stay here and bitch and cry and nothing ever changes.

What can employers do? Since Singaporeans are impossible to motivate to be more productive and want high pay and easy job, the easiest way is to cut salary.

InnoHippo

20,123 posts since Jun '04 14 Feb `08, 4:09PM Originally posted by elindra:show
Can ~

But can you be as productive as the Hong Kongers?

They work like there is no tomorrow. Singaporeans want me time, complain about long work hours, cannot be scolded etc etc.

If you talk about USA, they have a minimum wage in place and high salary paid out but they are still competitive? Why? Because they are very productive. Productivity is high, planning is good, and despite the long hours and tough conditions (you should visit a USA meat processing plant if you have the chance), the people remain chirpy with high morale.

The average Singaporean cannot compete with the average Hong Konger in terms of productivity. They also dun have the Hong Kong never say die attitude.

So unless we change, we can just stay here and bitch and cry and nothing ever changes.

What can employers do? Since Singaporeans are impossible to motivate to be more productive and want high pay and easy job, the easiest way is to cut salary.


INNOHIPPO:

brutally true



eagle:


Well said

FROM FORUM IN SGFORUMS

=DJ UPDATE: GIC Has $5 Bln Paper Loss On UBS Investment - Source (2010/03/05 14:18PM)


--------------------------------------------------------------------------------



(adds background)



By P.R. Venkat

Of DOW JONES NEWSWIRES



SINGAPORE (Dow Jones)--The Government of Singapore Investment Corp. has incurred a paper loss of $5 billion on its investment in UBS AG (UBS) after its convertible notes become shares Friday, a person familiar with the situation said.

That represents about 45% of its original $11 billion investment in the Swiss bank.

In 2007, GIC acquired a 9% stake in UBS through convertible notes on a fixed coupon of 9% per annum with a two-year maturity period.

In a filing to the Securities and Exchange Commission in February, GIC said that it will convert the notes into 230.7 million ordinary shares of UBS on March 5, thereby bringing GIC''s stake in UBS to 6.6%.

A GIC spokeswoman confirmed to Dow Jones Newswires that the UBS notes were converted into shares.

Although there is currently a paper loss on GIC''s investment in UBS, the sovereign wealth fund has previously said this is a long-term investment and it has confidence in the prospects of the Swiss bank.

GIC manages Singapore''s foreign-exchange reserves. It is the world''s fourth-largest sovereign fund in terms of money managed, according to Deutsche Bank.

GIC was among a number of global sovereign wealth funds that invested in western banks or subscribed to their fund raising plans during the global financial crisis.

In September last year, GIC cut its stake in Citigroup to below 5% after it exchanged its convertible preferred stock in the bank to common stock and made a profit of US$1.6 billion over the conversion price as part of the transaction. In December, the sovereign wealth fund saw its stake diluted further in the U.S. bank to about 4% after the latest round of capital raising by Citigroup.

During that time, GIC said that will continue its investment in Citigroup and it was confident of the long-term prospects of the bank.



-By P.R. Venkat, Dow Jones Newswires; +65 64154 152; venkat.pr@dowjones.com



Click here to go to Dow Jones NewsPlus, a web front page of today''s most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=42fctzS7EoMCKahz38LMLQ%3D%3D. You can use this link on the day this article is published and the following day.




(END) Dow Jones Newswires

March 05, 2010 01:18 ET (06:18 GMT)

Copyright (c) 2010 Dow Jones & Company, Inc.

PLEASE KINDLY NOTE THAT WAVE A OF CORRECTIVE WAVE 2 HAS NOT ENDED...
HSI WAVE 2A FINAL TARGET--18200-18500
STI WAVE 2A FINAL TARGET--2600-2625

LONG AT YOUR OWN TICKET TO HELL
now news so bullish--technicals so bearish---CLASSIC CASE OF ONLY IDIOTS WILL KENA TRICK
IDIOTS ARE CONFUSED AT WHEN TO USE REVERSE PSYCHOLOGY OR WHEN TO GO WITH THE FLOW...
Y???
BECAUSE THEY ARE FUCKING IDIOTS..I SAY THAT AND I WILL SAY THAT AGAIN

IDIOTS THINK THEY ARE SMART TO COUNTER ME WITH TERM "REVERSE PSYCHOLOGY"...OH MY GOD--THAT MAKES THEM LOOK EVEN SILLIER--WE TRADERS ARE REVERSING THEM WHEN THE FUCKING IDIOTS THINK THEY REVERSE US!!!!!????

LOOK AT YOURSELVES IN THE MIRROR TO SEE WHETHER YOU HAVE THE FUCKING EXPERIENCE TO REVERSE EXPERIENCED TRADERS

ACT SMART BUT SO FOOLISH,CONFUSED THROUGH AND THROUGH--REALLY FUCKING IDIOTS

MY DARING PREDICTION---THIS FRIDAY---MARCH 5TH WILL BE A VERY BAD DAY FOR STOCKS...--based on the 4 brothers charts

Singapore, Abu Dhabi Face Losses on UBS, Citigroup (Update2)

March 2 (Bloomberg) -- It took the Government of Singapore Investment Corp. three days in 2007 to agree to prop up UBS AG, ailing from subprime losses. It may take a decade to recoup that investment of 11 billion Swiss francs ($10 billion).

GIC, manager of more than $100 billion of the city-state’s foreign reserves, faces a paper loss of about 5.6 billion francs when it becomes the biggest shareholder of UBS on March 5, as shares of Switzerland’s largest bank trade at a third of the conversion price on notes it holds.

Singapore isn’t alone among sovereign wealth funds facing losses from supporting banks in Europe and the U.S. in the credit crisis. More than $69 billion in investments by such funds has so far produced $20 billion in realized and paper losses, according to data compiled by Bloomberg. Hurt by their contributions to the health of the financial system and stuck with some of the investments for years, sovereign wealth funds may shy away from coming to the banks’ aid the next time.

“Once burned, twice shy,” said Charles Whitehead, a finance law professor at Cornell University in Ithaca, New York, who has tracked the strategy of such funds. “If a weak bank came back to them again for capital in the next crisis, the sovereign wealth funds won’t be there.”

That was one of the findings in a survey by FTI Consulting Inc. published on Feb. 15. In interviews with managers of sovereign wealth funds controlling about $2.5 trillion, FTI found that they are “particularly cautious with regard to supporting further bail-outs of distressed companies.” FTI didn’t identify the funds that took part in its survey.

Personal Touch

European and U.S. bank chiefs made personal pitches to the funds during the height of the mortgage market meltdown. Marcel Ospel, then chairman of Zurich-based UBS, called GIC Chief Investment Officer Ng Kok Song, according to comments they made at the time. Talks began on Dec. 6, 2007, and by the evening of Dec. 9, GIC had committed to make its biggest single purchase at the time.

Acknowledging that recouping the money might take longer than initially expected, Ng said in GIC’s annual report, published in September, that he still has “confidence” in the “long-term prospects” of the investment.

GIC, which declined to comment for this article, will receive 230.7 million UBS shares for its mandatory convertible notes this week for 47.68 francs each. UBS shares closed yesterday at 14.98 francs.

Qatar, Abu Dhabi

“The game turned out not as easy as it may have seemed,” said Florian Esterer, who helps manage about $55 billion, including UBS shares, at Swisscanto Asset Management in Zurich. “It will take probably more like a decade than three years” for UBS shares to return to 2007 levels.

There were some profitable deals too, such as Qatar and Abu Dhabi funds that waited until the depth of the crisis to invest in London-based Barclays Plc and Credit Suisse Group AG of Zurich. Yet one third of the winnings, which totaled $12 billion, resulted from a regulatory change rather than timing.

After the U.S. government required troubled banks to have more common equity instead of weaker tiers of capital, Citigroup Inc. had to offer favorable prices for its preferred shareholders to convert to common. That led to windfall profits of $4 billion for Kuwait and GIC on investments that would have lost $9 billion under their original agreements.

Not As Lucky

Abu Dhabi Investment Authority didn’t benefit because it didn’t buy preferreds when it came to the aid of New York-based Citigroup. So it may face a $4.8 billion paper loss when it is forced to convert its so-called equity units to shares starting this month at a price almost 10 times higher than the current value. Abu Dhabi filed an arbitration claim against Citigroup, which has the most writedowns and losses from the credit crisis, alleging the bank wasn’t forthcoming about its financial health when it was seeking capital. In a December statement, Citigroup said the claim is “without merit.”

A spokesman for the Abu Dhabi Investment Authority declined to comment.

There were other profitable bets on banks during the crisis, such as the September 2008 investment in Goldman Sachs Group Inc. by Warren Buffett’s Berkshire Hathaway Inc. Buffett purchased $5 billion of perpetual preferred stock with a 10 percent dividend, reaping Berkshire $500 million in annual payouts. He also received warrants to buy $5 billion of common stock for $115 a share at any time within five years. Based on yesterday’s closing price of $156.54, Berkshire’s sitting on a paper profit of $1.8 billion on the warrants.

Due Diligence

“One lesson that all investors, including the sovereign wealth funds, learned from this crisis is that you have to do the due diligence before investing,” said Rachel Ziemba, a senior analyst who tracks such funds at Nouriel Roubini’s Roubini Global Economics in New York. “The funds are already looking at fundamentals more closely. They’ll be more wary to take such big stakes in banks in the future.”

The funds’ banking investments in the crisis diverged from their traditional strategy of taking smaller stakes in an array of companies, Ziemba said. The diverse distribution of stakes in close to 100 firms in the U.S. that the China Investment Corp. revealed in a regulatory filing last month is proof that they’re going back to their original goals, she said.

In June, CIC increased its investment in New York-based Morgan Stanley by $1.2 billion, even though its first purchase was out of the money by about $2 billion on the $5.6 billion it put in the Wall Street firm. The fund took part in Morgan Stanley’s sale of new shares, saying it expects the investment bank to become more competitive. The equity units CIC bought in 2007 will convert to stock at $48 in August. Morgan Stanley shares closed yesterday at $28.19. CIC declined to comment.

Follow-up Support

Sovereign wealth funds tend to support the companies in which they had invested in times of need, said Nuno Fernandes, professor of finance at IMD Business School in Lausanne, Switzerland, who has been studying the funds. Still, the recent losses “had huge implications internally, and the funds were criticized by their local constituencies. They will invest less in financials going forward.”

Temasek Holdings Pte, a separate Singapore government fund that oversees more than $120 billion, sold its shares in Charlotte, North Carolina-based Bank of America Corp. for a $4.6 billion loss in early 2009. It had acquired the stock during the conversion of its stake in Merrill Lynch & Co. when the investment bank was bought by Bank of America.

Dilutions, Losses

After the initial round of investments by the sovereign wealth funds in late 2007 and early 2008, banks and brokers announced more losses on their mortgage assets. And they kept going back to investors for more money. The dilutions since then and the losses -- $1.25 trillion worldwide -- may make it difficult for some bank shares to recover to 2007-08 levels.

In the two years following GIC’s investment, UBS’s writedowns and losses from the credit crisis swelled almost threefold to more than $57 billion. UBS boosted the number of its shares by 98 percent since the end of 2007. Citigroup’s share count jumped almost six times in the same period.

After UBS’s capital raising was announced on Dec. 10, 2007, it drew criticism from other shareholders. Profond, a Swiss pension fund, said it was treated unfairly by the bank because it wasn’t offered the same deal, which included a 9 percent interest payment on the mandatory convertible notes sold to GIC and an unidentified Middle Eastern investor. Swiss tabloid Blick christened UBS the “United Bank of Singapore.”

“The majority of people at the end of 2007 expected this crisis to be a lot less severe than it in the end turned out,” said Dirk Hoffmann-Becking, a London-based analyst at Sanford C. Bernstein Ltd.

what great economists said during and after great depression


"We will not have any more crashes in our time."
- John Maynard Keynes in 1927

"There will be no interruption of our permanent prosperity."
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

"There may be a recession in stock prices, but not anything in the nature of a crash."
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929

"I expect to see the stock market a good deal higher within a few months."
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929

"This crash is not going to have much effect on business."
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices."
- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929

"This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

"Buying of sound, seasoned issues now will not be regretted"
- E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929

"Some pretty intelligent people are now buying stocks... Unless we are to have a panic -- which no one seriously believes, stocks have hit bottom."
- R. W. McNeal, financial analyst in October 1929

"...despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation..."
- Harvard Economic Society (HES), November 2, 1929

"... a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall."
- Harvard Economic Society (HES), November 10, 1929

"The end of the decline of the Stock Market will probably not be long, only a few more days at most."
- Irving Fisher, Professor of Economics at Yale University, November 14, 1929

"Financial storm definitely passed."
- Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

"I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress."
- Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929

"I am convinced that through these measures we have reestablished confidence."
- Herbert Hoover, December 1929

"[1930 will be] a splendid employment year."
- U.S. Dept. of Labor, New Year's Forecast, December 1929

"For the immediate future, at least, the outlook (stocks) is bright."
- Irving Fisher, Ph.D. in Economics, in early 1930

"...there are indications that the severest phase of the recession is over..."
- Harvard Economic Society (HES) Jan 18, 1930

"There is nothing in the situation to be disturbed about."
- Secretary of the Treasury Andrew Mellon, Feb 1930

"The spring of 1930 marks the end of a period of grave concern...American business is steadily coming back to a normal level of prosperity."
- Julius Barnes, head of Hoover's National Business Survey Conference, Mar 16, 1930

"... the outlook continues favorable..."
- Harvard Economic Society (HES), Mar 29, 1930

"... the outlook is favorable..."
- Harvard Economic Society (HES), Apr 19, 1930

"While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us."
- Herbert Hoover, President of the United States, May 1, 1930

"...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent..."
- Harvard Economic Society (HES), May 17, 1930

"Gentleman, you have come sixty days too late. The depression is over."
- Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

"... irregular and conflicting movements of business should soon give way to a sustained recovery..."
- Harvard Economic Society (HES), June 28, 1930

"... the present depression has about spent its force..."
- Harvard Economic Society (HES), Aug 30, 1930

"We are now near the end of the declining phase of the depression."
- Harvard Economic Society (HES), Nov 15, 1930

"Stabilization at [present] levels is clearly possible."
- Harvard Economic Society (HES), Oct 31, 1931

Jobless Recovery
What Does Jobless Recovery Mean?
An economic recovery, following a recession, where the economy as a whole improves, but the unemployment rate remains high or continues to increase over a prolonged period of time. This effect may be a result of cautious businesses that add hours to existing employees in order to increase production capacity rather than hiring new workers. Investopedia explains Jobless Recovery
An example of a jobless recovery occurred in the early 1990s. While the American recession from the late 1980s technically ended in the first quarter of 1991, the unemployment rate did not actually stabilize until the middle of 1992

from investopedia

who says jobs must recover then econ recover?? jobs are for commoners...people who create crisis dont listen to commoners

A Review Of Past Recessions
by Dan Barufaldi (Contact Author | Biography)Email Article Print FeedbackReprintsFiled Under: Economics, Insurance


Did you know that there have been several recessions in the U.S. since the "Great Depression"? It's surprising to be sure, especially when you see these events covered in the media as one-time horrors.

Let's take a look at some of these recessions, how long they lasted, how they affected gross domestic product (GDP) and unemployment, and what is known about what caused them. (For more on this read, What Caused The Great Depression? and The Crash of 1929 - Could It Happen Again?)

What's a Recession?
A recession historically has been defined as two consecutive quarters of decline in GDP, the combined value of all the goods and services produced in the U.S. It differs from the gross national product (GNP) in that it does not include the value of goods and services produced by U.S. companies abroad or goods and services received in the U.S. as imports. (For more on this see, The Importance of Inflation and GDP.)

A more modern definition of a recession that's used by the National Bureau of Economic Research (NBER) Dating Committee, the group entrusted to call the start and end dates of a recession, is "a significant decline in economic activity spread across the economy, lasting more than a few months."

In 2007, an economist at the Federal Reserve Board (FRB), Jeremy J. Nalewaik, suggested that a combination of GDP and gross domestic income (GDI) may be more accurate in predicting and defining a recession.

The Roosevelt Recession: (May 1937 - June 1938)

Duration: 13 months
Magnitude:
GDP Decline: 3.4
Unemployment Rate: 19.1% (more than four million unemployed)
Reasons and Causes: The stock market crashed in late 1937. Business blamed the "New Deal", a series of government-financed infrastructure work projects through the Works Projects Administration (WPA) and Civilian Conservation Corps (CCC). These camps provided work and room and board for more than 250,000 men. Government blamed a "capital strike" (lack of investment) on the part of business while "New Dealers" blamed cuts in WPA funding. The first Social Security Insurance deductions pulled $2 billion out of circulation at this time.
The Union Recession: (February 1945 - October 1945)

Duration: 9 months
Magnitude
GDP Decline: 11
Unemployment Rate: 1.9%
Reasons and Causes: The tail-end of World War II, the beginning of demobilization of military forces and the slow transition to civilian production marked this period. War production had virtually ceased and veterans were just beginning to re-enter the workforce. It was also known as the "Union Recession" as unions were beginning to reassert themselves. Minimum wages were on the rise and credit was tight.
The Post-War Recession: (November 1948 - October 1949)

Duration: 11 months
Magnitude
GDP Decline: 1.1
Unemployment Rate: 5.9%
Reasons and Causes: As returning veterans returned to the workforce in large numbers to compete for jobs with existing civilian workers who had entered the workforce during the war, unemployment began to rise. The government's response was minimal as it was much more worried about inflation than unemployment at that time.
The Post-Korean War Recession: (July 1953 - May 1954)

Duration: 10 months
Magnitude:
GDP decline: 2.2
Unemployment Rate: 2.9% (lowest rate since WWII)
Reasons and causes: After an inflationary period that followed the Korean War, more dollars were directed at national security. The Federal Reserve tightened monetary policy to curb inflation in 1952. The dramatic change in interest rates caused increased pessimism about the economy and decreased aggregate demand.
The Eisenhower Recession: (August 1957 - April 1958)

Duration: 8 months
Magnitude:
GDP Decline: 3.3%
Unemployment Rate: 6.2%
Reasons and Causes: The government tightened monetary policy to years prior to the recession to curb inflation, but prices continued to rise in the U.S. through 1959. The sharp world-wide recession and the strong U.S. dollar contributed to a foreign trade deficit. (For another view on trade deficits read, In Praise of Trade Deficits.)
The "Rolling Adjustment" Recession: (April 1960 - February 1961)

Duration: 10 months
Magnitude:
GDP Decline: 2.4
Unemployment Rate: 6.9%
Reasons and Causes: This recession was also known as the "rolling adjustment" for many major U.S. industries, including the automotive industry. Americans shifted to buying compact and often foreign-made cars and industry drew down inventories. Gross national product (GNP) and product demand declined.
The Nixon Recession: (December 1969 - November 1970)

Duration: 11 months
Magnitude:
GDP Decline: 0.8
Unemployment Rate: 5.5%
Reasons and Causes: Increasing inflation caused the government to employ a very restrictive monetary policy. The structure of government expenditures added to the contraction in economic activity.
The Oil Crisis Recession: (November 1973 - March 1975)
Duration: 16 months
Magnitude:
GDP Decline: 3.6
Unemployment Rate: 8.8%
Reasons and Causes: This long, deep recession was brought on by the quadrupling of oil prices and high government spending on the Vietnam War. This led to "stagflation" and high unemployment. Unemployment finally reached 9% in May of 1975. (For more on this see, Stagflation, 1970s Style.)
The Energy Crisis Recession: (January 1980 - July 1980)
Duration: 6 months
Magnitude:
GDP decline: 1.1%
Unemployment Rate: 7.8%
Reasons and Causes: Inflation had reached 13.5% and the Federal Reserve raised interest rates and slowed money supply growth, which slowed the economy and caused unemployment to rise. Energy prices and supply were put at risk causing a confidence crisis as well as inflation.

The Iran/Energy Crisis Recession: (July 1981 - November 1982)

Duration: 16 months.
Magnitude:
GDP decline: 3.6%
Unemployment Rate: 10.8%
Reasons and Causes: This long and deep recession was caused by the regime change in Iran; the world's second largest producer of oil at the time, the country came to regard the U.S. as a supporter of its ousted regime. The "New" Iran exported oil at inconsistent intervals and at lower volumes, forcing prices higher. The U.S. government enforced a tighter monetary policy to control rampant inflation, which had been carried over from the previous two oil and energy crises. The prime rate reached 21.5% in 1982.
The Gulf War Recession: (July 1990 - March 1991)

Duration: 8 months
Magnitude:
GDP Decline: 1.5
Unemployment Rate: 6.8%
Reasons and causes: Iraq invaded Kuwait. This resulted in a spike in the price of oil in 1990, which caused manufacturing trade sales to decline. This was combined with the impact of manufacturing being moving offshore as the provisions of North American Free Trade Agreement (NAFTA) kicked in. The leveraged buyout of United Airlines triggered a stock market crash.
The 9/11 Recession: (March 2001 - November 2001)
Duration: 8 months
Magnitude
GDP Decline: 0.3
Unemployment Rate: 5.5%
Reasons and Causes: The collapse of the dotcom bubble, the 9/11 attacks and a series of accounting scandals at major U.S. corporations contributed to this relatively mild contraction of the U.S. economy. In the next few months, GDP recovered to its former level. (For more information, read Crashes: The Dotcom Crash.)
Conclusions
So what do all these very different recessions have in common? For one, oil price, demand and supply sensitivity appear to be consistent and frequent historical precursors to U.S. recessions. A spike in oil prices has preceded nine out of 10 post-WWII recessions. This highlights that while global integration of economies allows for more effective cooperative efforts between governments to prevent or mitigate future recessions, the integration itself ties the world economies more closely together, making them more susceptible to problems outside their borders. Better government safeguards should soften the effects of recessions as long as regulations are in place and enforced; better communications technology and sales & inventory tracking allows businesses and governments to have better transparency on a real time basis so that corrective actions are made to forestall the accumulation of factors and indicators contributing to or signaling a recession.

More recent recessions, such as the housing bubble, the resulting credit crisis and the subsequent government bailouts are examples of excesses not properly or competently regulated by the patchwork of government regulation of financial institutions. (For another perspective on credit crisis, see The Bright Side of The Credit Crisis.)

Contraction and expansion cycles of moderate amplitude are part of the economic system. World events, energy crises, wars and government intervention in markets can affect economies both positively and negatively, and will continue to do so in the future. Expansions have historically exceeded previous highs in economic growth trends if capitalist fundamentals applied within regulatory guidelines govern the markets.



by Dan Barufaldi , (Contact Author | Biography)

Dan Barufaldi is an Independent Consultant associated with the management consulting and global business development firm, Globe Lynx Group, located in Lewiston, NY. He has a Bachelors degree in economics from Cornell University. Barufaldi has authored business articles and columns in four newspapers and several Chamber of Commerce publications.

Filed Under: Economics, Insurance

12 yrs ago was Clob, Now its S shares


http://forum.channelnewsasia.com/viewtopic.php?t=320153

look at how lousy singapore financial hub is

DJ MARKET TALK: Beauty China Undervalued Given Growth Outlook -ML (2007/07/02 14:23PM)


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0623 GMT [Dow Jones] STOCK CALL: Beauty China (B15.SG) is undervalued given its steady growth outlook, nationwide franchise and China''s booming cosmetics market, according to Merrill Lynch. Company due to acquire new plant for HK$293 million in 2H07 which Merrill says could be long-term positive; however, warns "it raises its risk profile in the near term given BCH''s lack of track record in this area." Brokerage has Buy rating, S$1.38 price target; trades down 0.8% at S$1.25 on thin volume, support at intraday low of S$1.22. (JEM)

DJ MARKET TALK: Harvest Fund QDII To Benefit S-Chips - UBS (2007/10/02 10:26AM)


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0226 GMT [Dow Jones] China''s approval last week for Harvest Fund QDII to invest in S-chips was six months ahead of expectations, says UBS. Expects move to trigger wave of liquidity in China shares listed in Singapore, or S-shares, which trade at a discount to Hong Kong peers; says companies with unique China exposure vs mainland and Hong Kong offerings look the most attractive. Top S-chip picks are Hungguo (H14.SG), Sino Environment (Y62.SG) and Raffles Education (R17.SG). (KIG)


Contact us in Singapore. 65 64154 150;
MarketTalk@dowjones.com


(END) Dow Jones Newswires

October 01, 2007 22:26 ET (02:26 GMT)

Copyright (c) 2007 Dow Jones & Company, Inc. DJ MARKET TALK:Merrill Cuts Celestial Target To S$1.18, Keeps Buy (2008/02/26 11:10AM)


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0310 GMT [Dow Jones] STOCK CALL: Merrill Lynch lowers target price for Celestial Nutrifoods (C56.SG) to S$1.18 from S$1.92, but keeps Buy call. Says firm likely to continue facing high soybean costs. "We believe the group could only pass on part of the higher costs and forecast an 8% drop in FY08 margins," says analyst Eddy Loh in note. But notes Celestial''s 4Q07 results were within expectations; company likely to see robust sales growth in 2008 through launch of new beverage and powder products, commercial startup of biodiesel plant in 3Q08. Share down 5.6% at S$0.67. (FCS)


DJ MARKET TALK: CIMB Keeps Celestial Nutrifoods At Outperform (2007/10/08 10:35AM)


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0235 GMT [Dow Jones] STOCK CALL: CIMB reiterates Celestial Nutrifoods (C56.SG) at Outperform, maintains S$2.23 target price. "We recently visited Celestial''s production facilities in Lindian and Daqing, China and came away convinced that its expansion plans are on track." Notes company has started producing two new products on trial basis, new biodiesel plant nearly completed, products prominently displayed in leading Chinese supermarkets. Says positive on outlook, but no change to earnings estimates. Stock currently +0.6% at S$1.55. (KIG)


DJ MARKET TALK: CIMB Raises Ferrochina Target Price To S$2.44 (2008/05/22 11:51AM)


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0351 GMT [Dow Jones] STOCK CALL: CIMB raises Ferrochina (F33.SG) target price to S$2.44 from S$2.11, reiterates Outperform call after plant visit. Broker says steel product maker''s expansion of Xinghai and Xingyu facilities appears to be on track. Adds new product lines should boost output, improve product mix and gross margins; company seeking strategic investor to move further upstream in order to secure raw materials. Says target price hike reflects, "improved business visibility and possible value-creation from strategic investors." New target price still assumes 35% discount to industry peers to reflect its smaller size. Share down 0.6% at S$1.64. (KIG)

DJ MARKET TALK: CIMB Raises FerroChina Target To S$2.11 (2008/04/29 16:35PM)


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0835 GMT [Dow Jones] STOCK CALL: CIMB raises FerroChina (F33.SG) target price to S$2.11 from S$2.09 after increasing FY08 earnings estimate 15% on enlarged capacity and higher average selling prices, or ASPs. Also raises FY09-10 forecasts to account for the timing of new capacity, higher ASPs, higher group expenses, lower forex gains. "Given FRC''s excellent business visibility, we maintain Outperform." Notes 1Q08 net profit +161% on-year at CNY188.5 million, came in 15% above house''s annualized estimate, but 6% below market consensus. Says key variance higher revenue of CNY3 billion (+167% on-year) with increased capacity from Superb Team acquisition, higher ASPs on strong demand, significantly higher other income as a result of forex gains from weaker USD/CNY, USD/SGD; notes 1Q08 net profit marks 23% of house''s FY08 forecast. Notes gross margin steady at 8.8% despite rising HRC feedstock prices, exacerbated by higher iron ore and coking coal prices. Share down 4.9% at S$1.37. (LES)
DJ MARKET TALK: DBS Keeps FerroChina At Buy, Target At S$3.38 (2007/10/25 16:29PM)


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0829 GMT [Dow Jones] STOCK CALL: DBS Vickers keeps FerroChina (F33.SG) at Buy, with target price at S$3.38 after company visit. "We continue to like FerroChina given its firm growth outlook, driven by both organic expansion and acquisitions." Says valuations undemanding at less than 9X FY08 earnings, with share one of cheapest Singapore-listed China plays above S$1 billion in market capitalization. "The successful acquisition of Superb Team will help transform FerroChina into one of China''s largest independent galvanised steel producers and help underpin robust earnings growth into FY09." Notes FerroChina to be among 10 largest S-chip by market capitalization after purchase; says should help attract QDII funds. Share up 4.2% at S$2.48. (LES)

DJ MARKET TALK: Ferrochina May Become Blue Chip - CIMB (2007/05/22 16:26PM)


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0826 GMT [Dow Jones] Ferrochina (F33.SG) off 0.9% at S$2.30 in heavy volume, slips back on profit taking after equaling record high of S$2.43 set on Friday. CIMB says company "poised to become a major global galvanized steel player and is likely to achieve blue-chip status in a few years." Keeps at Outperform with target price of S$3.10, based on 9.0X CY08 P/E; says "as the company continues to grow in size and establishes itself as a global leader in galvanized steel, we believe it should at least trade closer to its peers." Thinks expansion activities could lead to a threefold expansion in capacity in coming years. (JEM)


DJ MARKET TALK: Ferrochina Valuations Very Undemanding - Daiwa (2007/06/29 09:19AM)


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0119 GMT [Dow Jones] Ferrochina (F33.SG) +0.9% at S$2.21 on thin volume; current valuations very undemanding, with the stock trading at a 36% PER discount to Hong Kong-listed integrated steel stocks, according to Daiwa. Following company gaining full control over its associate, Superb Team, brokerage estimates total processing capacity will increase to 1.7 million tonnes, 4.25 million tonnes for FY07, FY08 respectively (+86%, 151% on year); says "resultant synergies and margin expansion would drive stronger earnings growth for FY07 and FY08." Raises target price to S$3.42 from S$2.29, keeps at Buy; upside capped at week high of S$2.30. (JEM)



DJ MARKET TALK: MS Starts China Milk At Overweight, S$2 Target (2007/11/02 13:57PM)


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0557 GMT [Dow Jones] STOCK CALL: Morgan Stanley starts China Milk Products Group (G86.SG) at Overweight with S$2 target. Says company is one of best plays on resource productivity, with cattle herd boasting best composition of pedigree bulls, cows in China. "We believe the market is missing the full benefits of the management''s ability to improve herd mix to drive higher milk yield, quality cattle semen and embryos, and in turn support margin trend, along with a further government push to improve cattle genetics in China." Stock +3.3% at S$1.24 midday. (FKH)

DJ MARKET TALK: Phillip Upgrades China Sun To Buy, 85.5C Target (2007/05/29 10:03AM)


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0203 GMT [Dow Jones] STOCK CALL: Phillip Securities ups China Sun Bio-chem Technology (C86.SG) to Buy from Hold, lifts fair value to S$0.855 from S$0.81; notes stock currently trades at valuations of 7.9x FY07 PER, 6.3x FY08 PER, believes "such low valuations are unjustified, given its leading industry position and medium term growth potential." Expects adjusted EPS to grow at 3-year CAGR of 19% between FY07, FY09 after company posted 23% on year rise in 1Q07 net profit to CNY82.1 million. Trades up 0.8% at S$0.67 on modest volume. (JEM)


DJ MARKET TALK: Beauty China Selloff Is Overreaction - ML (2007/09/27 08:15AM)


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0015 GMT [Dow Jones] STOCK CALL: Beauty China''s (B15.SG) share price fall on news 3Q earnings growth may slow is unjustified, says Merrill Lynch. "In our view, the market simply overreacted. We have pointed out our expectations for a slower 2H07 many times in our research, and BCH has also communicated cost concerns with investors before." Adds company remains cheapest China consumer play; "the recent price weakness represents a good entry point." No change to earnings forecast, reiterates Buy rating, maintains S$1.38 target. Shares closed down 2.7% at S$1.09 yesterday.(KIG)

DJ MARKET TALK: CIMB Keeps Beauty China At Outperform, Tgt S$1.67 (2007/11/22 16:12PM)


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0812 GMT [Dow Jones] STOCK CALL: CIMB reiterates Beauty China (B15.SG) at Outperform with target price of S$1.67; says target at 60% discount to China retail peers due to its smaller size. Says Beauty China trading at 9X 2009 earnings vs 20X for Singapore-listed China retail stock China Hongxing (BR9.SG). Notes commercial production at company''s new plant began mid-October, group has secured HK$2 million worth of orders. Notes 9M07 earnings about 68% of CIMB FY forecast; projects 4Q07 revenue of HK$197.8 million with net profit at HK$38.2 million; expects margins to narrow on seasonally higher A&P expenses, higher packaging costs, start-up losses from new plant. Share down 4.6% at S$1.24; STI down 0.9%. (LES)

DJ MARKET TALK: Beauty China Fundamentals Still Good -UOBKH (2008/06/13 14:07PM)


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0607 GMT [Dow Jones] STOCK CALL: Beauty China''s (B15.SG)fundamentals remain intact with no slowdown for China retail sales, says UOB KayHian; reiterates Buy call, keeps target price unchanged at S$1.38. Notes cosmetics firm''s shares are now 43% below 52-week high of S$1.48 hit on Jan 2; blames fears of slowdown in consumption following China snowstorms, earthquake and concerns over margin squeeze from higher raw material prices. But says China retail sales still solid, registering record high in April whilst new products, increasing utilization rates should help ease margin pressure. "Considering the bright prospects of the cosmetics industry, the production ramp-up at the new plant and the launch of new products with higher margins, we remain positive on the stock." Shares currently down 0.6% at S$0.84. (KIG)









I REPOST OLD NEWS TO SHOW THAT NEWS AND FUNDAMENTALS ARE WORSE AND MORE INACCURATE THAN TECHNICALS... PUI ;OUSY S SHARES!!LUCKILY DUE TO ME LOOKING DOWN ON SINGAPORE ABILITY TO ATTRACT BIG FOREIGN COMPANIES,I DECIDED TO INVEST IN ZERO S SHARES FOR LONG TERM SINCE 2005.AND NOW WITH THESE NEWS ON CHINA MILK I WILL NOT EVEN TOUCH THEM FOR DAY TRADING..

I NEVER EVEN KENA ONE SUSPENDED SHARE DUE TO MY PRUDENCE.

AsiaWater
BeautyChina
Celestial
ChinaESave
ChinaMilk
ChinaSun
ChinaPDye
FerroChina
Fibrechem
GuangZhaoIFB
OrientCent
SinoEnv
Zhonghui


"superb" s shares..
HOW MANY MORE WILL SUSPEND??

Home > Breaking News > Singapore > Story
Feb 12, 2010

S'pore - 53rd most liveable

By Jessica

SINGAPORE scores highly in areas like infrastructure and stability, but fares poorly in culture and living environment indices.

As a result, it was ranked the 53rd most liveable city in the annual survey by the The Economist Intelligence Unit (EIU), which compared 140 cities worldwide. Vancouver again topped the list, followed by Vienna and Melbourne in Australia. Three other Australian cities also made it to the top 10 list - Sydney, Perth and Adelaide.

The Republic scored better than culture capitals New York and London, which lost out because of crumbling infrastructure, but lagged behind other Asian capitals like Hong Kong, Tokyo and Osaka.

The survey examined 30 factors in five categories - stability, healthcare, culture and environment, education as well as infrastructure. Singapore obtained an overall score of 88.5/100.

The annual survey uses research involving resident experts and its own analysts.

Singapore lost out in the environment and culture category, in which it scored 75.7/100, lower than Hong Kong and South Korea. But it got full marks for infrastructure. The Lion City also fared well for stability, healthcare and education.

WHY THE FINAL TARGET OF 2375--2400???

point1:
WE ARE CURRENTLY IN WAVE 2 OF 5 WAVE ELLIOT THEORY..

WHY WAVE 2??

--from Elliott wave principle
From Wikipedia, the free encyclopedia

Wave 2: Wave two corrects wave one, but can never extend beyond the starting point of wave one. Typically, the news is still bad. As prices retest the prior low, bearish sentiment quickly builds, and "the crowd" haughtily reminds all that the bear market is still deeply ensconced. Still, some positive signs appear for those who are looking: volume should be lower during wave two than during wave one, prices usually do not retrace more than 61.8% (see Fibonacci section below) of the wave one gains, and prices should fall in a three wave pattern.

WAVE 1 WAS STI VALUE FROM 1455 TO 2950 AS THERE ARE NO SIGNIFICANT CORRECTIONS--a correction is defined to be 10 percent or more..

a.in april 2009-sti drop from 1942 to 1791--drop of 8.3pervcent

b.in may 2009,sti drop from 2283 to 2094--drop of 8.3percent ALSO!!!!

c. in june-july 2009,sti drop from 2417 to 2211--a drop of 8.5percent !

d. in aungust 2009, sti drop from 2700 to 2521--drop of only 6.7percent

THERE ARE NO 10PERCENT DROPS--CORRECTIONS as yet hence sti is due for a correction of at MOST 20percent from 2950...

point 2 :why 20percent??--because technically speakinga 20percent drop from the top is defined as "BEAR MARKET ENTRY POINT",hence there will be a lot of support there--
hence 80percent of 2950--2360!!!

point 3: as stated just now in point 1.--Wave 2: Wave two corrects wave one, but can never extend beyond the starting point of wave one. Typically, the news is still bad. As prices retest the prior low, bearish sentiment quickly builds, and "the crowd" haughtily reminds all that the bear market is still deeply ensconced. Still, some positive signs appear for those who are looking: volume should be lower during wave two than during wave one, prices usually do not retrace more than 61.8% (see Fibonacci section below) of the wave one gains, and prices should fall in a three wave pattern.

wave 1 gains stand at 1500 points:the 61.8percent of wave 1 stands at 2380!!!(depicted in chart)

point 4:300day SMA stands at 2295 as of 10feb 2010,hence when sti drift downwards,the 300days SMA shall go up to around 2350s-2400s

point 5: wave 3 is the strongest and longest wave of 5wave elliot theory..

Wave 3: Wave three is usually the largest and most powerful wave in a trend (although some research suggests that in commodity markets, wave five is the largest). The news is now positive and fundamental analysts start to raise earnings estimates. Prices rise quickly, corrections are short-lived and shallow. Anyone looking to "get in on a pullback" will likely miss the boat. As wave three starts, the news is probably still bearish, and most market players remain negative; but by wave three's midpoint, "the crowd" will often join the new bullish trend. Wave three often extends wave one by a ratio of 1.618:1.---wikipedia

hence 2375 will be the BEST launching pad to take sti to 3900,the 2007 highest point--as wave 1 was 1500points---u add that to wave 3 which is MINIMUM 1500points--WONT U GET 3900 minimum??

and as stated wave 3 extends wave 1 by 161.8percent ABOVE---hence sti will crack the 3900 and probably to 4700!!!!!!!!!

point no.6--sti BREAK DOWN of channel of 200points--2700 to 2521--hence the target is also 2300s to 2400.


in conclusion---please dont miss wave 3 UP!!

Swiber Holdings Limited (the “Company”) was informed on 27 January 2010 by a substantial shareholder, Goh Kim Teck, that he has entered into a credit facility with Credit Suisse AG,. Goh Kim Teck had entered into the following transactions with Credit Suisse AG:

(1) a sale of 15,000,000 ordinary shares of the Company to Credit Suisse AG;

(2) an uncapped collar transaction, involving the following:

(a) a put option granted by Credit Suisse AG to Goh Kim Teck relating to 15,000,000 ordinary shares of the Company with a strike price of S$1.0009;

(b) a call option granted by Goh Kim Teck to Credit Suisse AG relating to the same number of shares with a strike price of S$1.1121; and

(c) a further call option granted by Credit Suisse AG to Goh Kim Teck relating to the same number of shares with a strike price of S$1.3345; and

(3) another call option granted by Credit Suisse AG to Goh Kim Teck over the same number of shares with a strike price of S$0.00.

The purpose of transactions (1) to (3) was to provide Credit Suisse AG with collateral for the credit facility using the shares. As a result of transaction (1) Goh Kim Teck direct interest in the shares of the Company was reduced by 15,000,000 shares. As a result of transaction (3) Goh Kim Teck deemed interest in the shares of the Company was increased by the same amount. Goh Kim Teck total percentage level in the shares of the Company remains unchanged. As a result of transaction (2)(c), Goh Kim Teck retains the benefit of all the upside in the share price above the strike price.

buy more when hsi crosses 20828

ANOTHER ROUND OF KATEKS TRAP

AS IF THE BERNANKE POSITIVE NEWS IS NOT ENOUGH---

1.--BOJ Said to Be Open to Expanding Emergency Loans, Bond Buying

Jan. 25 (Bloomberg) -- Bank of Japan policy makers are prepared to consider expanding an emergency-loan program for banks and increasing purchases of government debt should the recovery falter, people with knowledge of the matter said.

The central bank’s board will leave interest rates and its lending program unchanged tomorrow, 16 of 17 economists said in a Bloomberg News survey. How it responds in coming months will depend on the extent of any further economic shocks -- such as a surge in the yen to November’s 14-year high -- the people said on condition of anonymity because the talks are private.

“Should a rise in the yen threaten to damp corporate and consumer sentiment and exacerbate deflation, the BOJ will probably expand the loan program,” said Masaaki Kanno, a 25- year veteran of the central bank who is now chief economist at JPMorgan Chase & Co. in Tokyo. “If that’s not enough, the bank may turn to more bond buying.”

While increased liquidity injections may help restrain the yen, an expansion of the monthly 1.8 trillion yen ($20 billion) of bond purchases may spark concern the BOJ is financing the government’s deficit spending. Central bankers would have to counter any such perception, and may need to stress the urgency for Prime Minister Yukio Hatoyama’s administration to rein in the budget gap, one of the people said.

The Bank of Japan may be unique in considering additional monetary stimulus among the Group of 20 major economies this year. Exporters have led the rebound from the country’s worst postwar recession as falling wages, job losses and factory overcapacity hamper spending and deepen price declines at home.

Expand Credit Program

Central bank Governor Masaaki Shirakawa and his colleagues, who begin a two-day meeting today, will leave the benchmark interest rate at 0.1 percent tomorrow, according to all of the 17 economists surveyed.

One of the analysts, Hiromichi Shirakawa, chief economist at Credit Suisse Group AG in Tokyo and a former BOJ official, said the bank may expand the 10 trillion yen lending program it introduced Dec. 1 in reaction to the yen’s climb to 84.83 per dollar. The currency jumped more than 1 percent at the end of last week, to as high as 89.79 in Tokyo trading, underscoring the risk to the nation’s exporters.

The emergency lending facility, which provides commercial banks with funds for three months at 0.1 percent, could be expanded in stages, one of the people said. Along with increasing the size, officials might extend the maturity of the loans to six months, and later to 12 months, the person said.

‘Crucial Challenge’

Governor Shirakawa said last week that stamping out deflation is a “crucial challenge” and the bank will persist with its low-rate policy to aid growth. He said he expects the economy to keep growing, fueled by overseas sales, though the revival of exports and output has yet to spur domestic demand.

When the yen was trading around 93 per dollar on Jan. 7, Finance Minister Naoto Kan said he wanted it to weaken “a bit more” and he will seek to cooperate with the Bank of Japan on the currency’s level. The yen’s gain last week made it stronger than the 90-to-mid-90s range that Kan has said manufacturers regard as “appropriate.”

There are “still various policy measures that could be taken” by the government and the bank, Kan said Jan. 14. Last week he said it “would be going too far if the government asked the BOJ to implement specific monetary policy measures.”

With a public debt that’s almost twice the size of the economy, Kan may have little room to increase spending beyond the record 92.3 trillion yen budgeted for the year starting April 1.

‘Put the Heat On’

“The government may put the heat on the BOJ should the yen gain rapidly and stocks slide before the fiscal year end,” said Mari Iwashita, chief market economist at Nikko Cordial Securities Inc. in Tokyo. “The government is overwhelmed by the task of passing next year’s budget bill, so it has no choice but to depend on the BOJ if the economy stumbles.”

So far, borrowing costs remain contained even as the fiscal condition deteriorates, as deflation attracts investors to government debt. The yield on the 10-year note was at 1.325 percent on Jan. 22.

“I see a 30 percent chance that the bank will buy more bonds,” said Yasunari Ueno, chief market economist at Mizuho Securities Co. in Tokyo. “The BOJ at heart probably wants to prevent more bond purchases because any increase would fuel speculation” that it will monetize the debt, Ueno said.

Any consideration by the board to buy more government bonds may hinge on whether the bank sticks to a self-imposed rule of limiting its holdings of the securities lower than the amount of bank notes in circulation. Bank notes are decreasing and the room to increase bond purchases is narrowing, one of the people with knowledge of the situation said.

Another option is for the bank to specify the period for keeping rates low, one of the people said, adding that it’s not currently an urgent issue. When it introduced a quantitative easing policy of pumping cash into the banking system in March 2001, it said the step would stay until prices stopped falling.

To contact the reporters on this story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net; Masahiro Hidaka in Tokyo at mhidaka@bloomberg.net
Last Updated: January 24, 2010 10:01 EST

http://www.bloomberg.com/apps/news?pid=20601087&sid=amzUp8cG7ZHs



2.-SEC May Approve Restrictions on Short Sales When Stocks Plunge
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By Nina Mehta

Jan. 23 (Bloomberg) -- Concern that short-sellers accelerate stock declines may prompt the Securities and Exchange Commission to adopt a rule next month aimed at curbing bearish bets when equities are plunging.

The regulation would require the trades be executed above the best existing bid in the market when shares fall 10 percent in a day, said Brian Hyndman, the senior vice president in transaction services at Nasdaq OMX Group Inc. In a short sale, an investor borrows an asset and sells it, hoping to profit from a decrease by repurchasing it later at a lower price.

Forcing short sellers to wait for a stock to rise above the best price bid may prevent them from flooding the market with sell orders and causing losses to multiply. Some exchange officials say the restrictions known as uptick rules don’t work, citing studies that show they may be less effective during panics that drive prices down and volatility up.

“There is no empirical data to support the introduction of a new rule,” Hyndman said yesterday at a securities industry conference in Chicago. “But this is the least intrusive of the proposals the SEC was considering.”

Hyndman expects the SEC to adopt a so-called alternative uptick rule that includes a 10 percent trigger, changing regulations that were eliminated from U.S. markets in 2007. The commission asked the public last April to comment on strategies to cushion the impact of short selling following criticism that hedge funds and other speculators used trading tactics to deepen market retreats that began in 2008.

SEC spokesman John Heine declined to comment.

Computer Upgrades

The Standard & Poor’s 500 Index dropped 9.1 percent in September 2008 after New York-based Lehman Brothers Holdings Inc. filed the biggest-ever bankruptcy. The SEC implemented a ban on short selling more than 900 financial stocks that month after Morgan Stanley Chief Executive Officer John Mack and New York Senator Charles Schumer blamed the practice for driving companies to the brink of collapse.

The implementation date for the new rule is likely to be later in the year, according to Hyndman, who didn’t say what he was basing his estimate on. He said exchanges and brokers will probably have 180 days to upgrade their computer systems to accommodate the regulation.

Nasdaq in New York, Kansas City-based Bats Exchange and Jersey City, New Jersey-based Direct Edge Holdings LLC, which operates two alternative trading centers, have told the SEC that no new restrictions on short selling are needed. Paul Adcock, executive vice president in charge of trading at NYSE Arca, a unit of New York-based NYSE Euronext, said that while most exchanges oppose a new regulation, it’s probably inevitable.

Potential Impact

“Because the politicians and the public are all banging the drums, we’re not going to get away with this one,” Adcock said about the reluctance of exchanges to support new short- selling restrictions.

The SEC discussed the potential impact of such a rule when it proposed the alternative uptick last August. Because it would restrict short selling more than other proposals being considered, the regulation might “lessen some of the benefits of legitimate short selling, including market liquidity and pricing efficiency,” the commission said.

When the SEC proposed the alternative uptick rule, it said it would be easier for exchanges and brokers to implement than the former regulation that operated on the New York Stock Exchange for almost 70 years before its removal in 2007. That rule would no longer make sense in a marketplace of automated trading, the commission said.

No Trigger

The rule was proposed to the SEC last March by NYSE Euronext, Nasdaq, Bats and the Chicago-based National Stock Exchange. NYSE Euronext last June said it preferred a different bid test with no 10 percent threshold.

NYSE Euronext’s Adcock raised concern at yesterday’s conference that so-called circuit breakers setting off the restriction might keep stocks from falling as much as they should when a company reports bad news.

“Do you trigger the 10 percent when the stock should be trading down?” Adcock said. The trigger would be mandated uniformly across trading venues when a stock declines by the specified percentage.

Daniel Aromi and Cecilia Caglio, economists at the SEC in Washington, said in a December 2008 report to former Chairman Christopher Cox that even with uptick rules in place, short sellers in a simulation executed trades 25 percent faster on average when stocks plunged than when prices were steady.

To contact the reporter on this story: Nina Mehta in New York at nmehta24@bloomberg.net.
Last Updated: January 23, 2010 00:00 EST